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China-Based Artificial Intelligence Companies Conducting Industrial-Scale Distillation Campaigns Against U.S. AI Companies
NSA, CISA, and FBI warn DeepSeek, Alibaba, and other Chinese AI firms ran industrial-scale distillation of U.S. frontier models, threatening U.S. AI leadership.
A joint NSA, CISA, and FBI Cybersecurity Advisory (AA26-251A) says China-based firms DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI extracted billions of tokens from U.S. frontier models including Claude, GPT, Gemini, and Grok, likely with Chinese government knowledge. Campaigns running since at least late 2024 used native APIs, cloud providers, third-party aggregators, gray-market proxy "transfer stations", and shared premium subscriptions to bypass geographic restrictions, evade safeguards, and violate providers' terms of use. The agencies recommend detecting anomalous prompts, accounts, and usage patterns; subtly altering responses to suspected distillers; and cross-organization intelligence sharing. They also call DeepSeek's publicly cited $5.6M training cost misleading because it excludes data acquired through distillation.
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BlackHatSect0r Uses DeepSeek-Powered AI Agent to Automate Attacks and Harvest 16,834 Credentials
SOCRadar linked the BlackHatSect0r crew to a DeepSeek-powered AI agent that automated scanning and harvested 16,834 credentials from exposed systems.
SOCRadar researchers found an exposed operation server with 4.9 GB across 9,299 files, including the DXSCAN scanning platform, phishing tools, extortion material and a vault holding 16,834 credentials such as AWS keys, GitHub tokens and Stripe keys. The French-speaking crew ran a Nous Research Hermes agent against a DeepSeek model with safety features removed, queuing 2,759,860 domains and reaching 726,989 hosts. Access came from misconfigurations like public cloud buckets and exposed .env files, not new vulnerabilities.
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Chinese Hacker Uses DeepSeek AI to Orchestrate Vulnerability Exploits
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Chinese AI firms are siphoning capabilities from American models, CISA warns
CISA, NSA and FBI warn Chinese AI firms including DeepSeek and Moonshot AI extracted billions of tokens from US frontier models via distillation campaigns.
A joint CISA, NSA and FBI advisory says China-based firms including DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun and Z.AI have run industrial-scale knowledge distillation campaigns against US frontier models such as Claude, GPT, Gemini and Grok since at least late 2024, likely with Chinese government knowledge. The campaigns used gray-market API proxies called transfer stations, premium account pools and traffic routing to bypass restrictions, evade safeguards and exfiltrate billions of tokens used to train models like DeepSeek R1/V3 and Kimi. The agencies challenge DeepSeek's reported $5.6 million training cost and recommend identity verification, usage monitoring, response variation, differential privacy and indicator sharing as defenses.
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Chinese Hackers Use AI Agents in Multi
China-linked campaign used the SecFlow AI-agent framework (Claude, Qwen, DeepSeek) to automate intrusions against government targets in Taiwan, Indonesia, China and Vietnam.
Hunt.io documented a second China-linked campaign wiring commercial AI models into live cyberespionage, reconstructing the SecFlow orchestration system from five accidentally exposed open directories. Targets included Taiwan's Kuomintang Party archives, Indonesia's Ministry of Foreign Affairs, mainland Chinese government and education systems, and Vietnamese industrial hosts. The most extensive compromise hit a Fengtai District government Office Automation environment, yielding LSASS and registry hive theft, 822 user records and 1.28GB of attachments including patient health data. Tooling included a GLUTTON webshell hiding payloads in PNG pixels via steganography and a fake MySQL deserialization service for client-side code execution.
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Detect and disrupt AI-themed attacks with Microsoft Defender
Microsoft Threat Intelligence reports criminal campaigns impersonating ChatGPT, Copilot, Claude, and DeepSeek in phishing, AiTM, and malvertising attacks reaching 100,000 emails daily.
Microsoft Threat Intelligence observed a growing set of campaigns that abuse trust in popular AI brands: a ChatGPT-themed phishing campaign sent up to 100,000 emails in one day to steal payment card data, and a Claude-themed campaign used adversary-in-the-middle techniques to harvest credentials and access tokens. Other campaigns included malvertising for a fake AI Windows plugin delivering the Vidar stealer and fraudulent DeepSeek installers distributed via GitHub. Initial access broker Storm-3075 used AI-themed malvertising to distribute payloads for multiple downstream actors, and Microsoft notes the AI services themselves were not compromised. Microsoft also details Defender protections such as Safe Links, Safe Attachments, and attack disruption against these multi-stage lures.
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⚡ THN Weekly Recap: Top Cybersecurity Threats, Tools and Tips [3 February]
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PaperCut Attacker Uses Hundreds of AI Agents to Compromise 440+ Instances
GreyNoise and Blackpoint tracked an AI-assisted actor using OpenAI Codex and DeepSeek agents to exploit PaperCut flaws across 440+ instances in 48 countries.
A suspected Russian-speaking actor exploited the CVE-2026-81578 authentication bypass and CVE-2026-82078 RCE chain in PaperCut NG/MF, compromising at least 440 instances across 395 organizations in 48 countries, heavily targeting education in the US, UK, France, and elsewhere. The actor used hundreds of AI agents powered by OpenAI Codex and DeepSeek plus tools like Mimikatz, SharpHound, Certipy, Rubeus, and Impacket, reaching domain admin at 12 victims and full domain admin at a US high school within seven minutes. Post-exploitation included registry hive collection and Metasploit/Meterpreter payloads, with origin traced to IP 45.142.193.132.
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AI lets small actors run state-level hacking campaigns, Anthropic report finds
Anthropic's threat report finds AI let a Russian-aligned espionage campaign, a Chinese student-run exploit foundry and ShinyHunters operators run state-grade operations.
Anthropic's report covering December 2025 to August 2026 details a Russian-aligned espionage campaign by actor 'JackPoterz' — matching Midnight Blizzard behaviors — against more than 20 government and defense organizations across Ukraine and Europe, with AI agents autonomously rebuilding Windows implants to evade detections. Chinese undergraduates ran an automated vulnerability-research foundry using Claude agent swarms, yielding more than a dozen potential zero-days in one month. ShinyHunters-affiliated operators used AI to dump over 2,100 Azure access tokens across 40 corporate tenants in 34 hours. Seven Chinese labs including Alibaba, DeepSeek, Moonshot AI, Xiaomi and Zhipu distilled Claude outputs; Alibaba peaked at nearly 3 million exchanges per day from more than 3,500 fraudulent accounts to train its Qwen systems.
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August 2026 CVE Landscape
Insikt Group catalogs 73 high-impact August 2026 CVEs (43 Very Critical), including PaperCut, Zimbra, and Metabase flaws actively exploited or weaponized.
Recorded Future's Insikt Group identified 73 high-impact vulnerabilities in August 2026, 43 rated Very Critical, spanning 45 vendors with Microsoft accounting for roughly 11%. 31 vulnerabilities surfaced via CISA's KEV catalog, with others validated via open sources, vendor telemetry, and honeypot data. New Nuclei detection templates were released for CVE-2025-62593 (Ray), CVE-2026-72898 (Metabase), and CVE-2026-9198 (IBM Langflow). The report also highlights two AI-assisted operations: UAT-10147 exploited Zimbra, AjaxPro, Nacos, and Telerik servers before using DeepAudit and PentestGPT post-compromise, while a separate Chinese-speaking actor weaponized Hermes Agent and DeepSeek in a failed attempt.
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737 Chrome VPN Extensions Caught Routing Traffic Through Proxies. Check If You Have One
Researchers found 737 Chrome VPN extensions, many impersonating brands like NordVPN, routing roughly 75,000 users' browser traffic through attacker-controlled SOCKS5 proxies.
Socket and researcher Kush Pandya identified 737 Chrome VPN and proxy extensions, published across at least 40 developer accounts with 75,486 installs, that route entire browser sessions through one provider's SOCKS5 proxies on port 1082. Of these, 274 impersonate 66 established brands including Proton VPN, NordVPN, Surfshark, ExpressVPN, and Cloudflare 1.1.1.1. The proxy bypass list only excludes loopback addresses, exposing visited destinations, source IPs, TLS SNI values, and plain-HTTP request bodies to the operator. 221 extensions have been removed from the Chrome Web Store while 516 remain listed as active.
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CISA Flags Langflow RCE, Tomcat, and N
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ThreatsDay: AI-Powered Hacking, 370 Chrome Flaws, SonicWall Attacks, DNS Hijacking + 22 More Stories
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⚡ Weekly Recap: SD-WAN 0-Day, Critical CVEs, Telegram Probe, Smart TV Proxy SDK and More
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Human Attacker Hits Machine-Speed Exploitation of Marimo RCE
Sysdig details a human attacker chaining pre-auth RCE in Marimo (CVE-2026-39987) to AWS credentials and a bastion host in eight seconds.
Sysdig's Threat Research Team documented an intrusion where an operator exploited CVE-2026-39987, a pre-auth RCE in the Marimo notebook terminal WebSocket endpoint, gaining an interactive shell with no credentials. The attacker harvested AWS credentials from the process environment and Redis backend, retrieved an SSH private key from AWS Secrets Manager, and authenticated to an internet-reachable bastion host. The chain fired in eight seconds after roughly four hours of toolkit building, logging over 850 commands during a nine-hour session. The flaw, fixed in Marimo 0.23.0, has been on CISA's KEV catalog with a May 7, 2026 federal remediation deadline.
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The Self-Expanding Stolen Inference Supply Chain: An AI Agent Harvesting and Re-Serving LLM Access, (Fri, Sep 11th)
An autonomous coding agent harvested LLM API access from poorly secured gateways and aggregated stolen inference capacity behind a self-hosted gateway
A SANS researcher observed a semi-autonomous coding agent finding weakly secured LLM resale gateways via FOFA queries, creating trial accounts with temporary emails and CAPTCHA solving, and exploiting weak authorization such as client-supplied group_id fields. The agent validated stolen keys using factorial code-logic tests, then loaded roughly 379 upstream endpoints into a self-hosted New-API gateway, disabling 341 fake or dead channels. Five model names including claude-opus-5 and gpt-5.6-sol were served via round-robin and failover, forming a partially self-expanding inference supply chain resembling an evolution of LLMjacking.
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AI-powered attack exploited PaperCut flaws to hack 395 organizations
AI-driven campaign exploited PaperCut flaws CVE-2026-81578 and CVE-2026-82078, compromising 440 servers at 395 organizations in 48 countries.
GreyNoise reports a likely Russian-speaking threat actor used hundreds of AI agents combining OpenAI Codex and DeepSeek models to build, test, and refine exploits for CVE-2026-81578 and CVE-2026-82078 in PaperCut NG/MF, launching the campaign on August 31. At least 440 PaperCut instances at 395 organizations across 48 countries were compromised, with the education sector accounting for roughly half of victims and the US most targeted. Attackers harvested credentials from 280 victims, obtained OS or domain secrets from 147, and gained admin privileges at 12 organizations, using LSASS dumping, pass-the-hash, noPac, and DCSync to dump NTDS.DIT. The adversary went from empty workspace to first RCE in under four hours, and compromised at least 11 organizations within 26 seconds once the campaign launched.
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Hackers Deploy Hundreds of AI Agents to Compromise 440 PaperCut Servers
AI-agent campaign exploited PaperCut CVE-2026-81578 and CVE-2026-82078, compromising 440 servers at 395 organizations and reaching Domain Admin in 12.
GreyNoise tracked a likely Russian-speaking actor that used AI agents (OpenAI Codex, a DeepSeek model) to exploit an authentication bypass (CVE-2026-81578) and unsafe-reflection RCE (CVE-2026-82078) in PaperCut NG/MF starting August 31, 2026. At least 440 servers across 395 organizations in 48 countries were compromised, with one US high school going from initial access to Domain Admin in seven minutes. Escalation relied on LSASS and registry credential harvesting, pass-the-hash, the noPac technique (CVE-2021-42278/CVE-2021-42287), new Domain Admin accounts, and DCSync to steal NTDS.DIT data. Operators staged registry hives, used Ligolo tunneling and certutil Base64 encoding for exfiltration, and one attempt was blocked by Cloudflare WAF.
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